Insider transactions can give investors a more complete view of activity within the world’s publicly-listed companies. No one has more insight into a company’s prospects than its executives and directors.
In this report, we are going to highlight some interesting insider buying at London Stock Exchange Group (LSEG:LN). London Stock Exchange is a leading global financial markets infrastructure and data company. Its services include capital markets services, data and analytics solutions, and post trade services. The company is listed on the London Stock Exchange and currently has a market capitalization of £38.6 billion.
London Stock Exchange: Insider Buying
Our records show that between 8 March and 19 March, three insiders at London Stock Exchange bought stock. Those were purchased stock were:
● Senior Independent Director Stephen O’Connor (2,950 shares @ £72.5)
● Non-Executive Director Cressida Hogg (1,150 shares @ £75.57)
● Non-Executive Director Kathleen DeRose (300 shares @ £78.79)
Combined, these insiders spent around £330,000 on LSEG stock.
This director dealing activity is worth highlighting for a couple of reasons. Firstly, these insiders have purchased stock in a ‘cluster buying’ pattern. This is a bullish buying pattern that often provides powerful trading signals.
Secondly, two of these insiders have significant industry experience. Previously, Stephen O’Connor was Chairman of the International Swaps and Derivatives Association from 2011 to 2014. Before that, he worked at Morgan Stanley for 25 years, where he held a number of senior roles including Global Head of Counterparty Portfolio Management and Global Head of OTC Client Clearing. O’Connor was also a member of the High Level Stakeholder Group for the UK Government’s review of the Future of Computer Trading in Financial Markets.
Meanwhile, Kathleen DeRose has spent 30 years working in global finance and asset management. Previously, she held a number of senior roles at Credit Suisse Group AG including Managing Director (Head of Global Investment Process, Asset Management). This industry experience gives these insider transactions more informational value.
Share Price Fall
London Stock Exchange shares have fallen this month on the back of the company’s full-year results.
The results were generally quite solid. Total revenue was up 3% for the year to £2,124 million while adjusted earnings per share were up 5% to 209.7p. Meanwhile, the company hiked its full-year dividend by 7% to 75p per share, reflecting the good performance and confident outlook for the group.
However, the market did not like the fact that the company advised that it expects higher operating expenses in 2021 and sees an increase in capex to about £850 million with associated operating costs of £150 million. This cost guidance was higher than expected.
“On balance, a disappointing set of results," said analysts at Citigroup.
The recent insider buying here suggests that insiders see the share price weakness as a buying opportunity. We see this cluster buying pattern as a bullish signal.